Date based can be denoted as a debt in which an individual has rights over the principal and receives interest that accrues from the borrower (Sutherland and Hoeller, 2012). Some of the advantages of debt based include:
Based on the fact that the lender does not have a claim with respect to equity, a debt based asset or rather item has no effect on the overall’s owner’s interest within a business entity.
The interest as well as principal obligations are predetermined hence they can be planned for.
In terms of a company, the interest that accrues from the debt is deductable on the overall tax return of the company thereby lowering initial amount of the loan.
Advantages of coins/bills
A buyer is able to obtain a trade credit with the existence of a bill
For legal purposes, a bill signifies that a debt actually exists
A seller is provided for with easier access to financing
Coins are long term as compared to paper money that can wear out anytime
They are easier to make and process thereby reducing the overall production costs
Advantages of Changes
There are a number of changes that are incepted within macroeconomics. For instance:
Positive change in the employment sector increases the standard of living amongst citizens within a particular economy.
A positive change in the overall gross domestic product is a clear representation of a strong economic basis within a country
A change in tax systems increases government revenue that is consequently converted in equal developmental projects within the country
Changes in economic growth increase the chances of people getting employed, boosts trade within the country that further has a positive impact on the country’s economy
Inflation on the other hand, enables the adjustment of employment wage of the country, boost economic growth, makes it easier for business corporations as well as the government to make adjustment of relative prices
- Sutherland, D., & Hoeller, P. (2012). Debt and macroeconomic stability: An overview of the literature and some empirics.